The invention discloses a powder ash air-entrained concrete building block and a preparation method thereof. The powder ash air-entrained concrete building block is prepared by adding water to 100-200kg of cement, 350-380kg of lime, 1350-1550kg of powder ash, 1.4-1.5kg of aluminite powder and 0.195-0.205kg of foam stabilizers. The preparation method comprises the following steps of raw material preparation, metering, stirring, pouring in a mould, standing for procuring, demoulding, swinging to cutting parts for cutting, steaming and curing in a reactor and finished product warehousing. The building block has the advantages of light weight, good heat insulation, machinability, convenient construction, wide source of raw materials, high production efficiency, low production energy consumption and good fire protection and sound insulation, wherein the dry volume density of the building block is 500-700kg / m3 and amounts to one third of a clay brick; as a large quantity of air holes and micro holes are arranged inside the building block, the building block has favorable heat insulation; as coarse aggregates are not used, the building block has favorable machinability, can be sawn, dug,drilled and nailed and bonded by bonding materials, thereby providing beneficial conditions for building construction; and the building block belongs to a green environmental-protection product.